Efficiency Boost

Co-ops' Continued Emphasis on Conservation May Help Meet New EPA Rules

by Reed Karaim

January 4, 2016January 5, 2016

“A penny saved is a penny earned,” Ben Franklin once reportedly observed. But if Franklin, who was fascinated by electricity all his life, worked in today’s power industry, he might give his saying a modern twist: “A megawatt saved is a megawatt earned.”

Electric cooperatives, with their focus on affordable power, have subscribed to that adage for decades. But if the Obama administration’s Clean Power Plan survives legal challenges, this history of efficiency could gain renewed importance as power providers work to drastically cut carbon dioxide emissions from fossil-fueled plants.

“The Clean Power Plan gives some flexibility to the states on how they meet emissions requirements,” says Brian Sloboda, a senior program manager with NRECA Business and Technology Strategies (BTS). “States that choose energy efficiency as one of their compliance tools could see a big boost in programs aimed a demand-side management, which is right in the wheelhouse of electric co-ops.”

An NRECA survey found that 82 percent of generation and transmission (G&T) and distribution co-ops already have an energy-savings program. Nationally, cooperatives have 10 percent of peak retail electricity sales but are responsible for 20 percent of peak reduction, according to the U.S. Energy Information Administration. The value of energy efficiency has led to its moniker as “the fifth fuel,” on par with coal, natural gas, nuclear, and renewables as a resource for meeting power demand.

Electric cooperatives are promoting energy-efficient products through rebate programs and education campaigns. They’re helping to finance geothermal heat pumps that dramatically reduce energy use and cut consumer power bills. They are working to improve the energy efficiency of the homes of lower-income members, and providing commercial and industrial members with support for sophisticated energy-management systems.

“Co-ops have been engaged in promoting and utilizing energy efficiency and demand response for decades. It’s part of what we do,” says Alan Shedd, Touchstone Energy® Cooperatives principal for resident and commercial energy.

In addition, NRECA is working with coops to research the potential for more efficient operations and energy savings at every step of the power delivery chain. “All the way from mining the coal to beyond the socket,” says Mike Casper, NRECA BTS senior manager for generation and fuels. The effort is intended to provide an array of technological options that electric co-ops and statewide associations can consider as they work with their state regulatory agencies to develop initial submittals under the Clean Power Plan.

There’s even more ahead. Nearly three-fourths of electric co-ops say they are planning to expand their existing efficiency programs in the next two years, according to NRECA research.

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Everybody Wins

A crew installs a geothermal heat pump at a home in Western Farmers Electric’s service area. (Photo courtesy Western Farmers Electric)

Western Farmers Electric Cooperative, a G&T based in Anadarko, Okla., that serves 22 distribution co-ops in Oklahoma, New Mexico, and Texas, is one of several G&Ts working with its member co-ops to take energy efficiency to a new level.

Western Farmers and its member co-ops have long had a summer “beat the peak” energy-reduction program in which the co-ops use a variety of means to cut peak demand. But the G&T still faces the need to build additional generation to meet growing demand, especially from the oil and gas industry.

With that in mind, Western Farmers is expanding its efforts to help consumers use power more efficiently. “Our CEO said, let’s structure our energy efficiency program to see if we can knock 30 megawatts out of the plant we’re going to be building,” says Mark Faulkenberry, Western Farmers’ senior manager, member relations.

Doing so would save the G&T an estimated $50 million in construction costs by building less generation, Faulkenberry says, “and we could use the decrease of the energy as part of our carbon-reduction effort.”

A pilot project conducted with the assistance of BTS showed ground-source heat pumps could provide big energy savings for consumer-members across Western Farmers’ territory while reducing on-peak capacity requirements by as much as 2.2 kW for a typical home. But the geo-loops, which use buried water-filled tubes to transfer heat to or from the ground, have upfront installation costs that would dissuade most consumers from making the change. They’d also mean the G&T’s member co-ops would be selling less electricity, impacting their bottom line.

The solution Western Farmers settled on was to lower the cost of ground-source heat pumps by providing assistance to its distribution co-ops to install and own the geo-loop systems. Falkenberry says selling “thermal energy services” is not unlike the typical co-op model of running lines and poles to sell kilowatt-hours, only in this case they’re running ground loops to sell heating and cooling. “Rather than metering the energy and selling it per unit, the co-ops have a fixed monthly charge based on the capacity of the loop.

“The beauty of this is everybody wins,” he adds. Western Farmers gets the long-term benefits it hoped for; participating consumers see significant savings in their power bills; and the local co-op sees a reduction in its wholesale power costs while also expanding its business model into geothermal.

Caddo Electric Cooperative is the leading distribution partner in the Western Farmers effort. Since November 2012, the Binger, Okla.-based co-op has installed 330 coop- owned geothermal loop systems, and the program is growing steadily, says Boyd Lee, the co-op’s director of marketing.

Under the program, the co-op will install a geothermal system with no upfront loop cost to the consumer, Lee says. “Our goal was to make geothermal the wisest choice there is on our system.” The cooperative has an installation fee built into the customer charge, which appears on the member’s monthly bill. But even with the fee, Lee notes, the geo-energy rate is lower than the co-op’s standard rate.

A technician from Western Farmers installs a geothermal HVAC unit. (Photo courtesy Western Farmers Electric)

The geothermal system also comes with another advantage. “It really goes far in improving our system load factor over time,” Lee says.

Like most co-ops, Caddo Electric is heavily residential with a seasonal load factor that has a heavy peak in summer when air-conditioning units turn on across the South. But consumers who ordinarily heat their houses with natural gas in the winter are now using electric geothermal systems.

“We not only reduce the kilowatt demand of our summer peaks, but we add to the kilowatt sales in the winter season,” Lee says. “We can definitely see the impact on our bottom line.”

The shift away from gas heating to geothermal electrical is an example of “environmentally beneficial electricity.” It’s a concept that could play an important role in the drive to cut carbon dioxide emissions by burning fewer fossil fuels, according to Keith Dennis, NRECA BTS senior principal for end-use solutions and standards.

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Smart Energy Use

The idea is that as the grid adds more renewable energy and both power generation and end-use become more efficient, it makes more sense to use electricity to power a greater share of our modern lifestyle.

“On the consumer side, you have very efficient electrical appliances, and on the generation side, you have more efficient and cleaner generation,” Dennis says. “So you’ve got these things working together, and it makes sense to use electricity for more end-uses. It’s environmentally friendly.”

Grid-controllable water heaters can help manage demand and shave peak load.

Dennis cites electric vehicles and heat pump heating and cooling systems as electrically powered options that are better than their fossil-fueled alternatives. “Heat pump technology, for example, is 200 to 300 percent efficient or more,” he says.

Promoting smart energy use also means making sure utilities can use the best options to help the grid operate efficiently, which was a priority earlier this year when NRECA worked to get legislation passed that allowed the continued use of controllable, large-capacity water heaters to manage demand and shave peak load.

The successful effort was also an example of the way utilities are working with a range of other interested groups on energy efficiency. “We worked with environmental advocates and manufacturers to get the water heater legislation passed,” Dennis says. “We’ve also been working with a multi-stakeholder group on manufactured housing, which is a place where boosting energy efficiency can really help to improve the situation for co-ops and the quality of life for our members.”

Manufactured Homes

East Kentucky Power Cooperative, a G&T based in Winchester, Ky., that serves 16 member co-ops in the central and eastern part of the state, has been a leader in the effort to boost the energy efficiency of manufactured homes. The cooperative is working with the Systems Building Research Alliance, the research arm of the manufactured homes industry, and with Clayton Homes, the largest manufactured home builder in the nation, to improve the efficiency of these units in East Kentucky Power service areas.

The G&T has reached an agreement with manufacturers so that any order for a new manufactured home on the lines of its member co-ops is flagged, and the home is automatically upgraded to ENERGY STAR standards. “Our system pays for that upgrade,” says Scott Drake, East Kentucky Power’s manager of corporate technical services. “The member gets an ENERGY STAR-certified home with a heat pump without additional expense in almost all cases.”

East Kentucky Power Cooperative has been a leader in efforts to boost energy efficiency in manufactured homes. (Photo courtesy East Kentucky Power Cooperative)

The cost is about $1,750 to upgrade the shell of the house and add a heat pump to meet the higher standard, he says, but the savings to the member can be significant. “The electric bill hasn’t been over $60 a month for the first member who participated,” Drake says.

“We have a large percentage of our distribution co-ops’ membership that live in manufactured homes, and that’s where a disproportionate amount of our complaints about high bills come from,” he notes. “We want to make sure those members are comfortable and as energy efficient as possible.”

The benefits to East Kentucky Power and its member cooperatives include higher member satisfaction and a better demand profile with less-severe hot weather peaks. The manufactured home program is only one of several the G&T has developed in collaboration with its member coops to encourage energy efficiency, including rebates for ENERGY STAR appliances.

To track the difference the overall effort is making for consumers, East Kentucky Power has turned to a sophisticated cloud-based software system that provides a comprehensive view of their energy efficiency programs. “With the click of a button, we know exactly how many kilowatt-hours we saved in any program, or all programs, or how much money we’ve spent. It tracks everything we do with energy efficiency,” Drake says.

The system, Direct Technologies’ Energy Efficiency Collaboration Platform, also makes it easier for consumers to apply for ENERGY STAR rebates, he adds. They can input information online, take a photo of their receipt, and submit it over the Internet on their own time without ever having to call the co-op directly.

This All Comes Naturally

On the generation side, NRECA’s Casper says, “co-op power plants are pretty darn efficient already, so there’s not a lot of room for improvement.”

But to help co-ops meet Clean Power Plan requirements, NRECA is reviewing technology options that include greater use of coal-bed methane as fuel, advanced coal-drying techniques that help producers burn less coal, and condensing heat exchangers or other system upgrades that boost the heat-rate (the amount of energy required to create one kilowatt-hour) in coal-fired plants.

Other possibilities include maximizing utility-scale solar and wind generation or adding biomass, such as sawdust, to the fuel mix for existing coal-burning facilities to reduce the overall carbon dioxide content.

For transmission, improvements could include installing smart modules along lines to enhance power flow from renewable generation on congested systems. Another option is increasing battery storage at the end of the line, which could make better use of generation sources like wind that are active at night when transmission lines are often half-loaded. Batteries and other energy storage systems could be charged during off-peak periods with wind energy and used during peak loads, offsetting fossil-fuel generation.

On the member’s side of the meter, promoting smart appliances, LED and CFL lighting and, for industrial and commercial users, smart building energy management systems can result in significant improvements in efficiency, NRECA’s Sloboda says.

And while deploying programs, given all the options, may seem like a daunting prospect, these efforts are part of co-ops’ commitment to the best interests of their members, which has existed from the start, Sloboda adds.